Oil falls by 1% as ceasefire talks continue

Oil prices fell in early Asian trading on Monday, giving up gains made on Friday, as peace talks between Israel and the Palestinian Islamic Resistance Movement (Hamas) in Cairo eased fears of a widening conflict in the Middle East.

US inflation data also reduced expectations of interest rate cuts soon.

Brent crude futures fell $1, or 1.1 percent, to $88.50 per barrel before rising to $88.55 by 0149 GMT. West Texas Intermediate crude futures fell 84 cents, or 1 percent, to $83.01 per barrel.

A White House spokesman said that Israel agreed to listen to American concerns regarding the humanitarian repercussions of the possible Israeli invasion of the city of Rafah.

Markets are also awaiting the Federal Reserve’s (US central bank) monetary policy review on May 1.

Data on Friday showed that inflation in the United States increased 2.7 percent in the 12 months to March, exceeding the central bank’s target of 2 percent.

Low inflation increases the possibility of lowering interest rates, which in turn enhances economic growth and demand for oil.

On the other hand, the rise in the dollar enhances expectations that interest rates will remain high for a longer period. The rise of the dollar makes oil more expensive for holders of other currencies.